Monday, October 08, 2012

The Worse Way

Homeowners living near the city’s Bloor subway line have been complaining about steadily increasing noise and vibration in their homes for years, reported the Toronto Star on Thursday. After being initially ignored by the Toronto Transit Commission (TTC), a study was eventually conducted that confirmed that, yes, the subway line is a lot noisier than it used to be. By 400%, in some cases. The TTC blames aging infrastructure, and agrees that something must be done.

Which they'll get around to eventually.

The logic behind public transit, as opposed to the privately owned and managed services that preceded the TTC, is that a key piece of infrastructure would be managed with the public's interests at heart. No major decisions being made by dollar chasers willing to cut corners to fatten their own profits. Nine decades of working under this collectivist assumption has gotten us exactly the problem that public ownership was intended to solve.

While the top hatted monopolists have been dispensed with, their modern descendants in spirit over at the union hall continue the work of extracting economic rents from transit riders and taxpayers. The old private streetcar operators had government backed monopolies over certain routes. Now the governed owned operator has a total monopoly over the whole city and the unions have a monopoly over the supply of labour. Instead of shareholders extracting economic rents, it's the unionized employees and their leadership.

When public transit was still in private hands, decisions on hiring, investment and operation were made essentially on an economic basis. It would have been economically foolish to run streetcar or bus lines, to say nothing of a subway line, into sparsely populated neighbourhoods. Yet once the TTC was under municipal control, which rhetoric aside means political control, that is exactly what happened. The Bloor-Danforth line, the subject of the above complaints, was built in the 1960s into parts of the city where the population density was insufficient to support such a massive piece of infrastructure.

The construction of lines into economically nonviable parts of the city was a bad business decision, but a good political move. The suburban councillors, even in areas where the subway line did not run, supported the expansion because it made it easier to increase service in their areas. A compound effect soon took hold. If Etobicoke could get a subway, why couldn't Scarborough get a Rapid Transit line (i.e. glorified monorail)? Then calls came for the abolition of fare zones.

From the inception of Metro Toronto in 1953 until 1973 the TTC operated using a fare zone, charging more for suburban commuters. With the abolition of the fare zone system the TTC became chronically dependent on funding from the city and province. The driving force behind abolishing the fare zones were suburban politicians attempting to curry votes. While there were practical problems with administering the zone system, and it is arguable whether it could be reimplemented today, their abolition was another sign of politics triumphing over sound business decisions.

The initial financial impact of abolishing the fare zone was limited. The city had already been providing a modest subsidy for about a decade and the province, in those lush Bill Davis days, began kicking in addition funding. The TTC remained well financed, well maintained and its routes continued to expand into the 1980s. When decades of over spending caused a massive retrenchment of the provincial budget under Mike Harris, the TTC saw its provincial funding eliminated. From then on it has been living from hand to mouth.

Caught between between a public angry at diminishing service, a political class that no longer sees transit as a big voter winner and aging infrastructure, the TTC is in a game it can't win. About 70% of the operating costs of the system are paid for through the fare box, the rest coming from city and sundry revenues such as advertising and rent. This excludes any major capital projects such as new subway lines or significant repairs to existing infrastructure. To put the TTC back in the operational black would require a combination of steep fare increases, reductions in service and wage rollbacks.

None of these things are politically feasible, though each are what a private business would have done decades ago, assuming that a private enterprise would have made so many lousy business decisions in the first place. What needs to end is not the rumbling along certain sections of the Bloor-Danforth line, that is merely a symptom of a deeper problem: The politicization of public transit.

Comments

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“About 70% of the operating costs of the system are paid for through the fare box.”

As compared to NYC or Paris where funding is 50/50. With the 50% coming from government, a known and predictable quantity, so that capital expenditures can be made with confidence and so that maintenance can be made to avoid “the subway line is a lot noisier than it used to be. By 400%, in some cases. The TTC blames aging infrastructure, and agrees that something must be done.”

Pure Libertarianism won’t work. We need some government. But we don’t need 40% of GDP to be government. We don’t need government running the LCBO. We did need government to build transcontinental railroads to places not yet populated and ditto we need subway lines with a 100 year pay-back that isn’t suited to “business” investment decisions.

The TTC should be a subject where conservatives and progressives can agree that for environmental reasons and for productivity reasons (the efficient movement of the middle class labour force) that we need to increase the number of subway stops to match Singapore, HK and other world class cities.

The case for more subways based on the environment and productivity versus $10 billion for Samsung windmills should be easy.

The root cause of this “politicization of public transit” rests in the definition of political capital investments. Currently that investment definition means more money for government unions. Instead it should be tangible capital investment in underground tracks.

Rob Ford has taken on the government unions successfully. Unfortunately he has not built a team of support to take on the other levels of government required to support a massive capital infusion into public transit. Metrolinx was supposed to do that by The Big Move which was supposed to take decisions up the chain beyond the leftie pro government union base of Toronto downtown councillors who don’t want a subway for the GTHA because they never venture north of Bloor. But McGuinty let Metrolinx get sidetracked with his Samsung billions and scandals like eHealth and ORNGE and close to a billion to pay contractors to cancel (NIMBY) gas utilities.

Until we elect a Mayor, who can talk to pension funds with the help of Queens Park (we also need a pro transit Premier), we won’t get the subway system we need.

It’s OK for government to spend money if we get value for our money …e.g., more rails instead of padded government union jobs on the TTC. But many progressive politicians don’t want capital investment in rails; they just want bigger union payrolls to help them get re-elected.

There is a role for government where we can’t have competition. Subways are the quintessential example of that; so are mega hydro projects like Niagara. But our current crop of politicians lack Adam Beck leadership.

Provide the option of more rails for the middle class and then Cy you can charge your toll like they do in “The City” of London. But don’t slam the middle class with tolls until you have adequate subways in place as an alternative to driving and paying tolls.

Subways work in London, Paris, NYC, HK, Singapore and Delhi. They easily pay for themselves if you factor in the cost of gridlock in terms of pollution, gas costs and person hours sitting in traffic instead of productively working.

Subways are an example of where progressives and conservatives should be able to agree to have government actually do something that's productive.